New body to watch over flood funds

Opposition Leader
Tony Abbott
will today outline budget cuts that could be used to fund the recovery from cyclone Yasi and the recent floods in Queensland and elsewhere around Australia.

The shadow cabinet signed off late yesterday on measures such as scaling back water buybacks.

Prime Minister
Julia Gillard
also stepped up pressure on the Coalition to spell out its policy as she announced a new “reconstruction inspectorate" to ensure the rebuilding program delivered value for money. Moving to boost support for her $1.8 billion flood levy, the Prime Minister named former Liberal state premier and federal minister
John Fahey
as chairman of the inspectorate and appointed senior business executives to help him.

Key independents remained unconvinced about the levy, however, as the government prepared to introduce legislation on Thursday to authorise the impost.

The Coalition shadow ministry and shadow cabinet were in a meeting all afternoon to consider legislation and to approve a series of budget cuts to cover the amount of the levy.

Sources said the Coalition plan included cuts to the water buyback program, which was mooted by Mr Abbott on the weekend, but would not specify other changes.

The government is preparing to challenge the Coalition plan on the grounds that savings must be greater than $1.8 billion to keep the budget balanced, given that Mr Abbott is opposing a series of budget measures including changes to pharmaceutical benefits.

Legislation to set the levy is to be introduced into Parliament on Thursday.

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Today’s business will be largely devoted to condolence motions while the first question time of the year is to be held tomorrow afternoon.

The Prime Minister moved to assuage concerns about the federal recovery effort by announcing the inspectorate and saying that it would have the power to check all rebuilding contracts before they were signed.

Mr Fahey will chair the body and other members will include former Thiess managing director and Leighton Holdings director
Martin Albrecht
and Deloitte senior partner Matt Sheerin.

The group will report directly to a federal cabinet subcommittee that oversees the disaster recovery, which is chaired by Ms Gillard and includes Regional Affairs Minister
Simon Crean
.

Ms Gillard said Mr Crean would take the lead on all reconstruction outside Queensland, while Agriculture Minister
Joe Ludwig
would be responsible for efforts in Queensland, the state he represents in the Senate.

Alongside the formation of her new federal oversight group, the Prime Minister announced the appointment of two federal representatives to the Queensland Reconstruction Authority to help oversee the outlay of federal money.